How long will an IVA/debt management plan stay on my credit history?

For people struggling with unmanageable debt, debt solutions such as an IVA (Individual Voluntary Arrangement) or a debt management plan can be a `lifeline`, helping them regain control of their finances and look forward to a debt-free future.

However, many people are worried about the impact these debt solutions may have on their credit history.

What is my `credit history`?

Your credit history is a record of your credit activity over a certain period of time. This activity is recorded by credit reference agencies and stays on your credit history for six years.

That means that anything you do with credit - such as taking out a loan, using your credit card or missing a debt repayment - can be recorded on your credit history for future lenders to see.

A lot of people believe that credit reference agencies have a `credit rating` for each person, but that is not strictly true - each potential lender will assess your application based on their own criteria. This will determine a) whether they will lend you money, and b) what interest rate they will offer you.

In general, keeping up with each of your financial commitments will go down as a positive mark on your credit history, and this should make it easier for you to borrow money in the future. On the other hand, missing payments will go down as a negative mark, and this may make lenders more cautious.

How long will debt management/an IVA affect my credit history?

A lot of people who enter into an IVA or a debt management plan are concerned about the impact it may have on their credit history. And this is justified - both will indicate to lenders that you have not repaid your debts as agreed in the past. (This is something to weigh up against the potential impact - on your credit history - of not entering the debt solution.)

Since this information is recorded for six years, your credit activity may affect your ability to obtain future credit for up to six years after the activity has been recorded.

If you`re unsure about anything to do with debt management plans or IVAs, our debt advisers can answer your questions. Call 0800 195 2911 to speak to an expert.

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Tags: credit, bad credit, credit rating, credit history, how long, bad credit history, iva bad credit, debt management bad credit

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